Question
In: Accounting
QUESTION 22 Presented below is information related to Sheridan Manufacturing Company as of December 31, 2021:...
QUESTION 22
Presented below is information related to Sheridan Manufacturing Company as of December 31, 2021:
Projected Benefit Obligation 1,950,000
Accumulated OCI (PSC) 860,000
Fair value of the pension plan assets 1,445,000
The pension asset/liability reported on the balance sheet at Decermber 31, 2021 is
O Pension liability of $505,000.
O Pension liability of $1,950,000.
O Pension liability of S2,810,000.
O Pension liability of $1,445,000.
Solutions
Expert Solution
The correct answer for the question is Option A - Pension liability of $505,000. This Pension liability is calculated as follows:-
Pension Liability = Projected Benefit Obligation - Fair value of the pension plan assets.
Pension Liability = $1,950,000 - $1,445,000
Pension Liability = $505,000
Based on the above calculation, the correct answer is Option A - $505,000. This amount is the underfunded projected benefit obligation. Generally, this is the amount that is shown on the Balance Sheet as a Pension Liability. This is the correct answer.
Option B is incorrect as $1,950,000 is the amount that does not consider the fair value of the pension plan assets available.
Option C is incorrect as $2,810,000 is not the correct answer per above considerations.
Option D is incorrect as $1,445,000 is the value of the pension assets.
Please let me know if you have any questions via comments and all the best :) !
ekkarill92 answered 2 years agoRelated Solutions
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Presented below is information related to equipment owned by
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Cost
$9,630,000
Accumulated depreciation to date
1,070,000
Expected future net cash flows
7,490,000
Fair value
5,136,000
Assume that Sheridan will continue to use this asset in the future.
As of December 31, 2020, the equipment has a remaining useful life
of 4 years.
Prepare the journal entry (if any) to record the impairment of
the asset at December 31, 2020. (If no entry is
required,...
Sheridan Company’s balance sheet at December 31, 2021, is presented below. Sheridan Company Balance Sheet December...
Sheridan Company’s balance sheet at December 31, 2021, is
presented below.
Sheridan Company
Balance Sheet
December 31, 2021
Cash
$13,500
Accounts payable
$8,300
Accounts receivable
20,600
Common stock
21,900
Allowance for doubtful accounts
(860)
Retained earnings
12,710
Inventory
9,670
$42,910
$42,910
During January 2022, the following transactions occurred. Sheridan
uses the perpetual inventory method.
Jan. 1
Sheridan accepted a 4-month, 8% note from Betheny Company in
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3
Sheridan wrote off as uncollectible the accounts of...
Sheridan Company’s balance sheet at December 31, 2021, is presented below. Sheridan Company Balance Sheet December...
Sheridan Company’s balance sheet at December 31, 2021, is
presented below.
Sheridan Company
Balance Sheet
December 31, 2021
Cash
$13,500
Accounts payable
$8,300
Accounts receivable
20,600
Common stock
21,900
Allowance for doubtful accounts
(860)
Retained earnings
12,710
Inventory
9,670
$42,910
$42,910
During January 2022, the following transactions occurred. Sheridan
uses the perpetual inventory method.
Jan. 1
Sheridan accepted a 4-month, 8% note from Betheny Company in
payment of Betheny’s $3,600 account.
3
Sheridan wrote off as uncollectible the accounts of...
Sheridan Company’s balance sheet at December 31, 2016, is presented below. Sheridan Company Balance Sheet December...
Sheridan Company’s balance sheet at December 31, 2016, is
presented below.
Sheridan Company
Balance Sheet
December 31, 2016
Cash
$13,850
Accounts payable
$8,650
Accounts receivable
21,200
Common stock
19,000
Allowance for doubtful accounts
(810
)
Retained earnings
15,800
Inventory
9,210
$43,450
$43,450
During January 2016, the following transactions occurred. Sheridan
Company uses the perpetual inventory method.
Jan. 1
Sheridan Company accepted a 4-month, 8% note from Betheny
Company in payment of Betheny’s $3,600 account.
3
Sheridan Company wrote off as...
Presented below is information related to equipment owned by a company at December 31, 2017. ...
Presented below is information related to equipment owned by a
company at December 31, 2017.
Cost
$5,600,000
Accumulated depreciation to
date
640,000
Expected future net cash
flows
4,000,000
Fair
value
2,720,000
Assume that the company will continue
to use this asset in the future. As of December 31, 2017, the
equipment has a remaining useful life of 4 years.
Using the attached T-account
template:
Prepare the journal entry (if any) to record the impairment of...
Presented below is information related to Sheridan Company, owned by D. Flamont, for the month of...
Presented below is information related to Sheridan Company,
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Ending inventory per perpetual records
$22,600
Insurance expense
$12,300
Ending inventory actually on hand
18,300
Rent expense
20,200
Cost of goods sold
209,000
Salaries expense
54,500
Freight out
7,300
Sales discounts
10,400
Sales returns and allowances
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Sales
379,000
Prepare the necessary adjusting entry for inventory.
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Cost
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Accumulated depreciation to
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2,500,000
Value-in-use
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Fair value less the cost of disposal 5,400,000
Assume that ACtiv will continue to use this asset in the future.
As of December 31, 2018, the equipment has a remaining useful of 4
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Instructions
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Presented below is information related to equipment owned by ALALI Company at December 31, 2010. ...
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ALALI Company at December 31, 2010.
Cost
SAR 7,000,000
Accumulated depreciation to
date
1,500,000
Value-in-use
5,000,000
Fair value less cost of
disposal
4,400,000
Assume that ALALI will continue to use this asset in the future.
As of December 31, 2010, the equipment has a remaining useful of 4
years.
Instructions
Prepare the journal entry (if any) to record the impairment of
the asset at December...
. Presented below is information related to equipment owned by ALALI Company at December 31, 2010....
. Presented below is information related to
equipment owned by ALALI Company at December 31, 2010.
Cost
SAR 7,000,000
Accumulated depreciation to
date
1,500,000
Value-in-use
5,000,000
Fair value less cost of
disposal
4,400,000
Assume that ALALI will continue to use this asset in the future.
As of December 31, 2010, the equipment has a remaining useful of 4
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Instructions
Prepare the journal entry (if any) to record the impairment of
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Presented below is information related to equipment owned by Blossom Company at December 31, 2020. Cost...
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Cost
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Accumulated depreciation to date
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Expected future net cash flows
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